Wednesday, March 25, 2009

Rating Outcomes

Let's for a moment say that you run a business (if you don't already). You have forecasted your revenue for the quarter. Now consider the following scenarios:
  1. Revenue for the quarter exceeds expectations by 50%
  2. Revenue for the quarter exceeds expectations by 10%
  3. Revenue for the quarter is as expected
  4. Revenue for the quarter are short of expectations by 10%
  5. Revenue for the quarter are short of expectations by 50%
I'm willing to bet that if I asked you to rank these scenarios from best to worst, you'd rank them in the order I've presented them. I'm also willing to bet that you'd classify 1-3 as successes and 4-5 as failures. Feel free to comment if I'm wrong.

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